Consumer confidence fell slightly in July, precipitated by a weakening in consumers’ economic and job expectations, says Lynn Franco, Director of Economic Indicators at the Conference Board, commenting on the July report.
"However, confidence remains well above the levels of a year ago. Consumers’ assessment of current conditions continues to gain ground and expectations remain in expansionary territory despite the July retreat. Overall, indications are that the economy is strengthening and may even gain some momentum in the months ahead.”
Consumers’ appraisal of current conditions continues to improve, the Conference Board says. Those stating business conditions are “good” increased to 20.9 percent from 19.4 percent, while those stating business conditions are “bad” decreased to 24.5 percent from 24.9 percent. Consumers’ assessment of the job market was also more positive. Those claiming jobs are “plentiful” increased to 12.2 percent from 11.3 percent, while those claiming jobs are “hard to get” declined to 35.5 percent from 37.1 percent.
The Conference Board Consumer Confidence Index, which had improved in June, pulled back slightly in July. The Index now stands at 80.3 (1985=100), down from 82.1 in June. The Present Situation Index increased to 73.6 from 68.7. The Expectations Index decreased to 84.7 from 91.1 last month.
The monthly Consumer Confidence Survey, based on a probability-design random sample, is conducted for The Conference Board by Nielsen. The cutoff date for the preliminary results was July 18.
Consumers’ expectations regarding the short-term outlook weakened in July. The percentage of consumers expecting business conditions to improve over the next six months decreased to 19.1 percent from 21.4 percent. However, those expecting business conditions to worsen remained virtually unchanged at 11.2 percent.
Consumers’ outlook for the labor market was less upbeat. Those anticipating more jobs in the months ahead declined to 16.5 percent from 19.7 percent, while those anticipating fewer jobs increased to 18.1 percent from 16.1 percent. The proportion of consumers expecting their incomes to increase decreased moderately to 15.3 percent from 15.9 percent; however those expecting a decrease declined to 13.8 percent from 14.2 percent.